Fed staff should have known Silicon Valley Bank was vulnerable, new report finds

An outside review of the Federal Reserve's oversight of the failure of Silicon Valley Bank in 2023 has found the Fed's staff "knew, or should have known," that the bank was vulnerable prior to the crisis, Fed Vice Chair for Supervision Michelle Bowman said Friday.Bowman announced the initial results of the review, by the consulting firm Starling Advisory Group, in a speech in London. Silicon Valley Bank experienced a run in March 2023 after the bank announced it had sold securities at a $1.8 billion loss and needed to raise more capital. The bank's large holdings of U.S. Treasuries had lost value after the Fed began raising interest rates. The bank's deposits were "94 percent uninsured and concentrated in venture capital–backed technology companies," Bowman said the review found. Read more CNBC politics and policy coverageAfter the run, the heads of the Fed, the Federal Deposit Insurance Corporation and the Treasury Department issued a joint statement saying they would insure all deposits in the bank, even those above the FDIC's $250,000 limit. The bank's customers included tech startups and venture capital firms.The Fed's top supervisory officer at the time, then-Vice Chair for Su...